Spartan Oil Corp. Announces Financial and Operating Results for the One Month and Quarter Ended June 30, 2011 and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Aug. 15, 2011) - Spartan Oil Corp. ("Spartan" or the "Company") (TSX:STO), is pleased to report its financial and operating results for the one month and quarter ended June 30, 2011. Selected financial and operational information is outlined below and should be read in conjunction with Spartan's interim financial statements and the related management discussion and analysis which are available for review at www.sedar.com.

Spartan commenced active operations on June 1, 2011, following the completion of the Plan of Arrangement among Spartan Exploration Ltd., Penn West Petroleum Ltd. and the Company;

HIGHLIGHTS

Operational

Completed our first multi-stage horizontal well(50% WI) in the Keystone area of Pembina. The well was completed with a 15 stage oil based frac on June 25, 2011. After recovering 100 percent of the load fluid, the well was flowing at a rate of approx. 314 barrels per day (bbl/d) of new oil during a 48 hour period, following which the well was shut-in for pressure build up. The well is currently being equipped and is expected to be on production prior to the end of August at an initial rate that meets or exceeds our budgeted production rate of 150 bbl/d (first 30 day average).

Drilled our first operated Cardium horizontal well (100% WI) at Keystone. The well was rig released on August 11 and is scheduled to be fracture stimulated in early to mid September. The Company spud its second operated Cardium horizontal (97.12% WI) on August 12. This well is the Company's first drill inside the Keystone Cardium Unit No. 2. Finally, the Company is participating in 4 Cardium horizontal wells (25.26% WI each) in the Keystone Cardium Unit No. 1 (Keystone 1). The first of the Keystone 1 wells has already been drilled and rig released and the Company's partner is currently drilling the second well.

Equipped a vertical Bakken discovery well (50% WI) that was drilled earlier this year by the Company's predecessor at our Ceylon property in southeast Saskatchewan. Although not yet stable, early results from this well appear to be very encouraging. The well, which was not stimulated, is producing at approximately 25 bbl/d with a 100% oil cut. We believe that the potential for significantly higher rates exists through horizontal development. Spartan will continue to assess the productivity of this well over the coming weeks. The Company is considering various strategies for accelerating development of the Ceylon prospect including shooting 3D seismic over its lands and/or moving forward with a horizontal well drilling program. Spartan has 21 (10.5) net sections of Crown land on the Ceylon prospect.

Financial

Disposed of certain non-core assets in southwest Saskatchewan for proceeds of approximately $21 million; the disposed assets represent approximately 190 boe/d of production and 1.26 Mmboe of reserves to Spartan.

Maintained a strong balance sheet, with over $19 million in positive working capital and an undrawn line of credit of $18.5 million.

Achieved average daily production of 791 boe/d (78% oil and liquids) for the month of June.

Cash flow from operations for the month of June was $1.01 million.

Achieved an operating netback of $52.58 per boe and a corporate netback of $48.69 per boe.

Financial Highlights

One Month Ended June 30

2011

Financial

Total revenue

$

10,614,209

Cash flow from operations (1)

$

1,011,152

per share - basic

$

0.02

per share - diluted

$

0.02

Net earnings

$

8,687,794

per share - basic

$

0.17

per share - diluted

$

0.16

Capital expenditures

$

2,039,519

Working capital surplus (deficit)

$

19,239,068

Shares outstanding (2)

Weighted average during quarter

50,221,745

Actual at end of quarter

57,939,674

Operating

Oil equivalent (6:1)

Barrels of oil equivalent (000's)

23,720

Barrels of oil equivalent per day

791

Average selling price ($CDN per boe)

$

81.50

Royalties

$

11.57

Transportation costs (per boe)

$

0.35

Operating costs (per boe)

$

17.00

Oil production

Barrels (000's)

14,331

Barrels per day

478

Average selling price ($CDN per bbl)

$

105.11

Gas production

Thousand cubic feet (000's)

31,908

Thousand cubic feet per day

1,064

Average selling price ($CDN per mcf)

$

4.76

NGL production

Barrels (000's)

4,071

Barrels per day

136

Average selling price ($CDN per barrel)

$

67.52

OVERVIEW

The Company commenced active operations on June 1, 2011, following the completion of the Plan of Arrangement among Spartan Exploration Ltd., Penn West Petroleum Ltd. and the Company. Spartan has an attractive suite of oil weighted assets, concentrated in the Pembina area of central Alberta and in southeast Saskatchewan.

In Alberta, the Company has 50.5 (42.6) net sections of Cardium rights in the Keystone area of Pembina, consisting of 97.12% of the Keystone Cardium Unit No. 2 (Keystone 2), 25.26% of the Keystone Cardium Unit No. 1 (Keystone 1) and 10.5 (8.4 net) sections of non-Unit lands adjacent to Keystone 1 and 2. Spartan has identified 188 (158 net) Cardium horizontal drilling locations on company lands, based on conventional spacing of 4 wells per section.

In Saskatchewan, the Company has over 71 net sections of land in southeast Saskatchewan that is prospective for Bakken and/or Mississippian targets. Current activity is focused on the Company's plays at Torquay and Ceylon in southeast Saskatchewan.

On June 28, 2011, the Company announced the sale of certain non-core assets in southwest Saskatchewan for proceeds of $21 million. The disposed assets represented approximately 190 boe/d of production and 1.26 Mmboe of reserves to Spartan and resulted in a one-time gain of $8,681,029.

The disposition provides Spartan with significant financial flexibility and permits the Company to focus its financial and technical resources on its core growth assets in Pembina and southeast Saskatchewan. Spartan ended the quarter with over $19 million in positive working capital and an undrawn credit facility of $18.5 million.

For 2011, the Company has approved a capital program of $33.6 million. This program will involve the drilling of up to 14 gross (9.1 net) horizontal Cardium wells at our Keystone Pembina acreage. Spartan will also be advancing emerging plays in southeast Saskatchewan at Torquay and Ceylon which, although in the early stages, could be significant for the Company.

In June, Spartan completed its first multi-stage horizontal well in the Keystone area of Pembina. The well (50% WI) was completed with a 15 stage oil based frac on June 25, 2011. After recovering 100 percent of the load fluid, the well was flowing at a rate of approx. 314 barrels of oil per day (bbl/d) of new oil during a 48 hour period, following which the well was shut-in for pressure build up. The well is currently being equipped and is expected to be on production prior to the end of August at an initial rate that meets or exceeds our budgeted production rate of 150 bbl/d (first 30 day average).

In August, we drilled our first operated Cardium horizontal well (100% WI) at Keystone. The well was rig released on August 11 and is scheduled to be fracture stimulated in early to mid September. The Company spud its second operated Cardium horizontal (97.12% WI) on August 12. This well is the Company's first drill inside the Keystone Cardium Unit No. 2. Finally, the Company is participating in 4 Cardium horizontal wells (25.26% WI each) in the Keystone Cardium Unit No. 1 (Keystone 1). The first of the Keystone 1 wells has already been drilled and rig released and the Company's partner is currently drilling the second well.

In Saskatchewan, the Company is currently drilling the first well on the Company's Torquay property. The well is being drilled into a geological anomaly identified on the Company's proprietary 3D seismic program. The principal target of this well is the Midale.

At Ceylon, the Company equipped a vertical Bakken discovery well that was drilled earlier this year by the Company's predecessor. Although not yet stable, early results from this well appear to be very encouraging. The well, which was not stimulated, is producing at approximately 25 bbl/d with a 100% oil cut. We believe that the potential for significantly higher rates exists through horizontal development. Spartan will continue to assess the productivity of this well over the coming weeks. The Company is considering various strategies for accelerating development of the Ceylon prospect including shooting 3D seismic over its lands and/or moving forward with a horizontal well drilling program. Spartan has 21 (10.5) net sections of Crown land on the Ceylon prospect.

The management and directors of Spartan appreciate the support our shareholders have shown us. We remain committed to achieving per share growth for our investors, through a high quality, repeatable inventory of low risk oil drilling prospects.

READER ADVISORY

This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Spartan. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

In the interest of providing Spartan shareholders and potential investors with information regarding the Company, including management's assessment of Spartan's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Spartan believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.

In particular, this press release may contain forward looking statements pertaining to the following:

the performance characteristics of the Company's oil and natural gas properties;

oil and natural gas production levels;

capital expenditure programs;

the quantity of the Company's oil and natural gas reserves and anticipated future cash flows from such reserves;

projections of commodity prices and costs;

supply and demand for oil and natural gas;

expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and

treatment under governmental regulatory regimes.

The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Company's most recent management's discussion and analysis included in the material available on this press release.

The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:

changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

These factors should not be construed as exhaustive. Unless required by law, Spartan does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.

Readers are further cautioned that the preparation of financial statements in accordance with Canadian generally accepted accounting principles ("GAAP") requires management to make certain judgements and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Estimating reserves is also critical to several accounting estimates and requires judgments and decisions based upon available geological, geophysical, engineering and economic data. These estimates may change, having either a negative or positive effect on net earnings as further information becomes available, and as the economic environment changes.

Cash flow from operations and operating netbacks are not recognized measures under GAAP. Management of Spartan believe that in addition to net income, cash flow from operations and operating netbacks are useful supplemental measures as they demonstrate an ability to generate the cash necessary to repay debt or fund future growth through capital investment. Readers are cautioned, however, that these measures should not be construed as an alternative to net income determined in accordance with GAAP as an indication of Spartan's performance. Spartan's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to measures used by other companies. For these purposes, Spartan defines cash flow from operations as cash provided by operations before changes in non-cash operating working capital and defines operating netbacks as revenue less royalties and operating expenses.

Readers are also cautioned that this press release may contain the term reserve life index, which is not a recognized measure under GAAP. Management believes that this measure is a useful supplemental measure of the length of time the reserves would be produced over at the rate used in the calculation. Readers are cautioned, however, that this measure should not be construed as an alternative to other terms determined in accordance with GAAP as a measure of performance. The method of calculating this measure may differ from other companies, and accordingly, they may not be comparable to measures used by other companies.